Correlation Between VanEck ETF and IShares India
Can any of the company-specific risk be diversified away by investing in both VanEck ETF and IShares India at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining VanEck ETF and IShares India into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between VanEck ETF Trust and iShares India 50, you can compare the effects of market volatilities on VanEck ETF and IShares India and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in VanEck ETF with a short position of IShares India. Check out your portfolio center. Please also check ongoing floating volatility patterns of VanEck ETF and IShares India.
Diversification Opportunities for VanEck ETF and IShares India
0.87 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between VanEck and IShares is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding VanEck ETF Trust and iShares India 50 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on iShares India 50 and VanEck ETF is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on VanEck ETF Trust are associated (or correlated) with IShares India. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of iShares India 50 has no effect on the direction of VanEck ETF i.e., VanEck ETF and IShares India go up and down completely randomly.
Pair Corralation between VanEck ETF and IShares India
Given the investment horizon of 90 days VanEck ETF Trust is expected to generate 1.31 times more return on investment than IShares India. However, VanEck ETF is 1.31 times more volatile than iShares India 50. It trades about 0.08 of its potential returns per unit of risk. iShares India 50 is currently generating about 0.04 per unit of risk. If you would invest 3,057 in VanEck ETF Trust on August 23, 2024 and sell it today you would earn a total of 1,264 from holding VanEck ETF Trust or generate 41.35% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
VanEck ETF Trust vs. iShares India 50
Performance |
| Timeline |
| VanEck ETF Trust |
| iShares India 50 |
VanEck ETF and IShares India Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with VanEck ETF and IShares India
The main advantage of trading using opposite VanEck ETF and IShares India positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if VanEck ETF position performs unexpectedly, IShares India can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in IShares India will offset losses from the drop in IShares India's long position.| VanEck ETF vs. iShares MSCI India | VanEck ETF vs. Invesco India ETF | VanEck ETF vs. WisdomTree India Earnings |
| IShares India vs. iShares MSCI India | IShares India vs. Invesco India ETF | IShares India vs. WisdomTree India Earnings |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
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